The UK is being urged to shut down so-called 'vulture funds' that exploit a loophole in British law to pull huge amounts of money out of developing and war-torn countries, according to a new joint report between BBC Newsnight and the Guardian.

Here's how the funds work:

The funds legally buy up debt from countries that are facing some sort of disaster, be it natural or a war, and the country is defaulting. These debts may be decades old in some cases and are, at the time of purchase, worthless.

When the countries begin to stabilize, the funds use their deeds to cash in on the debts, tacking on huge amounts of interest.

Most countries won't accept these court cases, and vulture funds have been illegal in the UK since 2010. However, the island of Jersey's status as a tax-haven with separate financial laws means that cases are being brought before the countries courts by these vulture funds. The exact number and size of the transactions is unknown, due to secrecy laws in Jersey.

One case that has come to light through investigations regards the sale of Democratic Republic of Congo debt, originally a between loan from Yugoslavia to Zaire 30 years ago.

The loan was then sold, allegedly illegally, to a fund run by American Peter Grossman, FG Hemisphere. Grossman claims that loan is now worth $100 million, though it was only bought for $3.3 million. The debt is said to increase by $27,500 every day it is not paid. The DRC is currently the second poorest country in the world.